Gold Technical Report: Gold registered a third consecutive red candle yesterday after a continuous rally of 5 days earlier. It has a strong support at 10 DMA at 1892. The rally will be confirmed if it convincigly sustains important psychological 1900 mark for next few days.The golden crossover of 50DMA @ 1805 over 200 DMA @ 1777 last week has boosted the rally so far. The Medium term support stands at 200 DMA below which the trend may turn bearish. The short term Stochastics Oscillator is at 58 and Relative Strength Index is at 68.
Silver Technical Report: The silver prices, too declined following the Gold prices yesterday,after a robust performace last week. The medium term trend looks up as the prices continue to trade above 50 DMA @ 22.81. As 50 DMA has crossed above 200 DMA @ 21.04 on daily charts, gives indication of Buy on Dip. The Short term Stochastics Oscillator is at 52 and RSI momentum near 54.
Fundamental Report: Gold prices continue to trade in a limited range with a negative bias amidst the mixed messages sent by Federal Reserve officials have raised concerns that the Federal Reserve will backpedal the idea of slowing down the pace of interest-rate hikes. In an interview with the Wall Street Journal James Bullard, President of the St. Louis Federal Reserve said that the “Federal Reserve should not stall” on raising its rates. He said that he likes the idea of “front-loading” rate hikes saying that “the Federal Reserve should move as rapidly as it can to get its policy rate over 5% and then it can react to the data”.
Currently, analysts and market participants are anticipating that the Fed will raise rates by ¼% at the next FOMC meeting. This is in alignment with the CME’s FedWatch Tool which is forecasting a 93.3% probability of a 25-bps rate hike, and a 6.7% probability of a 50-bps rate hike by the Fed at their next meeting. The Federal Reserve raised its benchmark rate more aggressively last year than any other time since the 1980s. Beginning in March 2022 the Fed raised rates at every FOMC meeting with four consecutive jumbo 75-bps rate hikes. This took the Fed’s benchmark rate from 0-25 bps in February to 425-450 bps by the end of the year. The Federal Reserve is currently anticipating that they will raise rates until they reach their target of 5 ¼ to 5 ½% this year.